Famed boot manufacturer Dr. Martens is anticipating a significant financial blow from the tariffs imposed by the United States. The company, well-known for its iconic footwear, now produces most of its shoes in Vietnam, a move made in response to increased import duties stemming from the trade dispute initiated by US President Donald Trump.
Having previously relied on China for 50% of its manufacturing, Dr. Martens has strategically shifted its supply chain to mitigate the impact of US tariffs. Despite the tariff challenges, the company remains optimistic about achieving underlying pre-tax profits within the range of £53 million to £60 million for the full year.
In response to the tariff burden, Dr. Martens saw a sharp decline in its share price, dropping over 10% in early trading. The company, renowned for its distinctive yellow-stitched boots, is committed to fully offsetting the additional tariff expenses starting from the following year.
The latest update on tariffs coincided with the release of the company’s half-year financial results, revealing a reduction in losses to £11 million for the six months ending on September 28. During the same period, sales saw a modest 0.8% increase, reaching £327.3 million.
Ije Nwokorie, the CEO of Dr. Martens, expressed confidence in the brand’s strength, noting positive developments such as a 33% surge in shoe volumes and successful product launches. While acknowledging the uncertain market conditions, Nwokorie remains optimistic about the company’s prospects for the year ahead.
Commenting on the company’s performance, Russ Mould, an investment director at broker AJ Bell, highlighted the progress made by Dr. Martens in its journey towards profitability. While acknowledging the positive signs in the half-year results, Mould cautioned that the recovery process might be gradual rather than immediate.
Despite some encouraging aspects in the financial report, including improved product pricing strategies and better performance in the Americas region, investor sentiment was subdued, as reflected in the initial decline in the company’s share price.
